When I deploy the source files to a local folder on my web server (c:\inetpub\wwwroot\MySLApp) and point my IIS virtual directory to this path, I can browse to my SL app and it plays video files as expected.

When I deploy the exact same source files to a network share (\fileserver\c$\content\MySLApp) and point my IIS virtual directory to this path, I can still browse to my SL app, but it doesn't play the video files.

NOTES:

My web server is running Windows Server 2008 R2 Standard 64-bit

I have installed Expression Encoder on my web server

I have installed the Desktop Exprience feature

My application pool is running under a custom user that has full access to the local machine and the network share.

I just can't figure out/understand, why my SL app will work perfectly when pointing to a local folder, but when pointing to a UNC path, it still works, but the Expression Encoder functionality doesn't work.